Worked example: $75,000 with 15 vacation days and 10 holidays
The nominal rate is $36.06 (75,000 ÷ 2,080). Subtracting 25 paid days off (200 hours) leaves 1,880 worked hours, so the true rate is $39.89 — about 10.6% higher. If you are weighing a $50/hr contract offer with no benefits, remember to add 25–35% for self-employment tax, health insurance, and unpaid time off before comparing against this $39.89.
- • Contractor rule of thumb: target hourly = (salary ÷ 1,600) to cover benefits and gaps.
- • 55-hour weeks on a $110K salary pay a true $34.97/hr — less per hour than a $90K 40-hour job at $40.43.
- • Paid days off are compensation — a job with 25 PTO days is worth ~2% more than one with 15 at the same salary.
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Read the guideFAQ
How do I convert salary to hourly?
Divide annual salary by 2,080 (40 hours × 52 weeks) for the nominal rate. For the true rate per worked hour, subtract vacation and holiday hours first — salary ÷ (2,080 − paid days off × 8).
What is $75,000 a year hourly?
About $36.06 nominal per hour, or $39.89 per actually-worked hour if you receive 25 paid days off.
Is 2,080 hours always right?
Only for a 40-hour week with no unpaid leave. Use your real scheduled hours — a 37.5-hour schedule is 1,950 hours, which raises the hourly figure for the same salary.
Should contractors charge the converted rate?
No — that ignores self-employment tax (15.3%), health insurance, retirement contributions, unpaid time off, and non-billable sales/admin time. Most contractors need 1.3–1.6× the salary-equivalent rate to break even.
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